Losing control of costs is a kitchen’s biggest killer

Kitchen CUT Co-Founder John Wood recently wrote an article for Foodservice Equipment Journal about how controlling costs is critical for a successful and profitable kitchen. It just takes diligence and a willingness to respond to factual analysis.

John’s take on controlling costs

John Wood talks about the way kitchens are run and how the demands on an executive chef have changed dramatically since he came into the foodservice industry 35 years ago. Increasingly the biggest challenge in professional kitchens is not the necessary culinary skills, but organising the business, communicating with staff, handling suppliers, controlling the finances and coping with increased regulations.
Sadly it’s a sign of the times that businesses close as fast as they are opening, often because they failed to keep control of costs, the biggest of which is payroll, which can be huge, typically 40%, and then food and beverage costs, typically 30%. Controlling these costs is the key factor in the success or failure of a business.

Chefs can escalate through the ranks very quickly and suddenly find themselves in senior positions without the necessary commercial skills to successfully manage their kitchens, both financially and operationally. That skill gap can put huge pressure on chefs to learn on the job and learn quickly.

My mantra was and still is: if it can be measured it can be managed. This was the basic on which KitchenCUT was developed; to create a platform where chefs could easily manage their food costs, store their recipes and menus, have a place to access consultancy topics and find advice on a range of issues which occur in the kitchen. It is all about making the life of the chef easier.

In my work around the world, running kitchens and as a consultant, in the US, Asia, Europe and the Middle East, I was frustrated by management systems which all too often have been built by tech people who know nothing about the way a kitchen is run.

This is especially true of large groups where head office can seem far too isolated from the day-to-day problems thrown up at a particular location, especially when menus, information and promotions are shared.

Hotel and restaurant management is very similar around the world and the same issues arise wherever I go. I often find that hotels and restaurants are not properly analysing and understanding customer demographics and profiles, which is essential to ensure a product offering to attract additional clients and keep current ones. It’s the same for the single pub, bar or café.

Wastage is another major problem which can seriously impact on the bottom line. It is crucial to keep track of food wastage and ensures stock levels are kept to a minimum without the kitchen running out of important items. The cost of wastage per meal to a hotel business is reckoned to be 0.52p. Multiply those by the number of covers and you have an idea of how much money your business and the industry could save. For a restaurant with 750 covers a week this amounts to a loss of £20,280 a year and to recoup that loss you would have to take £68,000 in extra revenue. Imagine saving just £1 a day on just eight items, which can boost profits by £2,920 a year.

At the end of the day, the future of the industry depends on the next generation of chefs becoming more in tune with controlling costs. Remember, if it can be measured, it can be managed.